There is no straightforward, one size fits all answer to this question. The general answer, though, is that a company probably can discipline an employee for the use of illegal drugs outside of duty hours unless there is something about that particular issue in a contract that governs the employee’s work. However, it is much easier for the employer to get away with such discipline if it can be connected to some work-related issue.
Drug use is, of course, illegal. This means that there are generally no protections for people who use drugs. However, it is still safer for the firm to have policies in place and/or to be able to point to some way in which the drug use impairs the employee’s ability to function well in the work environment.
For example, if a worker will be handling dangerous equipment while at work, it is proper for the employer to expect that person to be completely sober. Drug use outside of work hours can still result in some cases in impairment while at work. This would clearly be a legitimate reason to discipline an employee.
If the employee is not intoxicated at work, the employer’s ability to discipline them is less certain. It may be possible if, for example, the employee gets arrested and might therefore bring negative publicity to the firm. However, this connection to work is more tenuous and might not be upheld.
In general, then, it is best for the firm to be able to say that the drug use is in some way detrimental to the employee’s ability to work. It may be able to discipline the employee even if it cannot establish this. However, it is on more solid ground if it can do so.